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Delisting

Trading Term

Delisting is the process by which a company’s stock is removed from a public stock exchange, such as the New York Stock Exchange (NYSE) or NASDAQ. Once a stock is delisted, it can no longer be traded on that exchange, though it may still trade over-the-counter (OTC) depending on the circumstances. Delisting can occur voluntarily, when a company chooses to go private or merge with another firm, or involuntarily, when it fails to meet exchange requirements, such as minimum share price, market capitalization, or financial reporting standards.

Involuntary delisting often signals financial distress or governance issues, and can hurt investor confidence, lower stock liquidity, and reduce access to capital markets. Voluntary delisting, however, might be strategic—for example, if a company wants to reduce regulatory burdens and public scrutiny, or is acquired by a private equity firm. For shareholders, delisting typically leads to reduced transparency and increased trading difficulty, which may affect the stock’s value. Nonetheless, delisted companies are still subject to certain legal obligations and may choose to relist in the future if conditions improve.

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